Monthly Archives

January 2022

2022 against background of generic investment stats and graphs

A not so Happy New Year? It’s too early to tell…

By | Investments

Compared to the positive market returns enjoyed last year, 2022 has started in a turbulent fashion, with investment markets seeing selling pressure over the first three weeks of the year. Despite the increase in volatility, we feel this is, once again, a time for investors to stay the course.

Since the new year, the mood in investment markets has darkened, with risk assets seeing falls across the board. The catalyst for this weakness is a combination of a number of factors, rather than being the result of a single defined cause. Inflation is remaining stubbornly high and indeed increasing across developed economies. Higher energy costs, increased costs of shipping, scarcity of components, and labour shortages are all feeding into uncomfortable inflation readings. The actions taken by central banks to combat inflation will be watched more closely than ever, although we would hope that the Federal Reserve and Bank of England will continue to take a measured approach to higher prices, and continue to offer markets forward guidance of the path they expect to take.

On top of the concerns over inflation, the tense situation between Russia and Ukraine is also spooking investors. The threat of conflict is rarely taken as a positive by markets, as the risk and potential economic fallout is hard to quantify. In this case, a further concern is the potential disruption to European energy supplies.

Whilst Covid-19 measures are easing in the UK, it is important to note that this is not the case around the World. Omicron variant numbers remain high across the US and Europe and it would be unwise to write off the potential for Covid-19 to wreak more economic damage.

Taking these factors into consideration, it is perhaps not surprising to see markets take a step back in the short-term. It is, however, important to remember the speed at which economies and investment markets have recovered from the worst effects of the Covid-19 pandemic, almost two years ago. 2021 saw gains from most asset classes and sectors, with only a few exceptions, and irrespective of the factors dominating market attention at the present time, a pause for breath and consolidation was always likely to happen.

Despite the gloomy picture painted above, there are reasons that investors should remain positive. Corporate earnings have, by and large, held up very well, and given the waning impact of Covid-19, supply chain issues – which have been ongoing since the start of the pandemic – should begin to ease. Not only will this help industries from many sectors of the economy, but may also help ease some of the inflationary pressures later on in the year. Companies remain cash rich and further merger and acquisition activity remains likely. This is often seen as a further sign of confidence.

Unlike the very high levels of uncertainty seen at the start of the pandemic, we do not believe the price action seen during the first trading days of 2022 is a matter for great concern. Whilst our view could change as events unfold, the global economy is in a better place than it was two years ago, and in any prevailing market conditions, there are always investment opportunities to explore that could lead to outperformance.

Bouts of higher volatility, as we are seeing currently, are not comfortable, but are an essential part of the investment process. In conditions such as those being experienced currently, our recommendation to clients is to remain invested in a diversified portfolio of assets, which offers allocation to a range of asset classes and good geographic spread. It is also worth noting that returns on cash are deeply negative due to elevated inflation and unless central banks take dramatic action to increase base rates, which we feel is highly unlikely, cash returns may well remain deeply disappointing for the foreseeable future.

As always, the team at FAS remain vigilant to the prevailing conditions, and remain on hand to discuss market conditions with our clients. If you are interested in discussing the above with one of our experienced financial planners, please get in touch here.


The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.  The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.

Wooden blocks with hand picking up one reading Trust

What you need to know about the UK Trust Registration Service

By | Financial Planning

With the deadline for registration now just six months away, we look at the steps trustees need to take to ensure they remain compliant with the regulations.

Trustees have to perform a number of duties to fulfil their role effectively; however, some may not be aware of the Trust Registration Service (TPR) and the additional requirement for trustees to comply with the new registration process.

Set up in 2017, the HMRC Trust Register was introduced to improve transparency of the beneficial owners of trust assets. Under new Anti-Money Laundering Directives adopted at the time, trustees will need to provide details of the trust, as well as information relating to the settlor (the individual or individuals creating the trust), trustees, and potential beneficiaries of the trust assets. For each interested party to the trust, the service will ask for the name, date of birth, national insurance number, and address to be registered, and if the trust is being registered for the first time, details of the assets held in the trust will need to be provided. You should be able to find these details in the trust deed.

As it stands currently, only those trusts who have UK tax to pay need to register using the Trust Registration Service. These are known as Taxable Trusts, and these include trusts that are liable to income tax, capital gains tax, inheritance tax, or stamp duty land tax.

The introduction of the Trust Registration Service casts a wider net, with many trusts that do not incur a charge to UK tax now faced with having to register for the first time. October 2020 saw the expansion of the Anti-Money Laundering Directives and as a result, so-called “Express” Trusts – even if there is no tax to pay – are now caught under the Trust Registration regime.

The term “Express” Trusts does not relate to their speed, but instead relates to those created intentionally by a Deed, by an express, or inferred declaration of trust. These are trusts that do not have an immediate liability to any UK tax, such as those used in estate planning.

One common type of Express Trust that will be caught by the expanded Registration Service are Bare Trusts. These are perhaps the most common form of trust, which are often found written into wills, when assets are left in a simple form of trust for a beneficiary who is below the age of 18. Assets in this type of trust are held by the trustees until the beneficiary reaches the age at which they automatically become entitled to the assets held in the trust. There is usually no tax liability to report on Bare Trusts as the UK tax liability is incurred by the beneficiary and not the trustee, and in the past trustees have not had to be involved in reporting to HMRC.

This all changes with the introduction of new rules, and Bare Trusts are caught within the remit of the Trust Registration Service. Bare Trusts created by way of deed, such as a gift from a grandparent during their lifetime into a trust for the benefit of grandchildren, will need to be registered on the service by the deadline, whereas those created by a will need to be registered if the trust is still in existence two years after death of the settlor.

For these Express Trusts, the deadline for registration has been pushed back a number of times since the measures were first announced. The deadline has now been confirmed as 1st September 2022, and all Express Trusts in existence on 6th October 2020, or created after this date, will need to have registered by this date. Trusts created after 3rd June 2022 will have 90 days to register on the service.

A small number of Express Trusts can avoid the registration process, with these being limited to Charitable Trusts, UK registered pension schemes, and trusts where a disabled person is a beneficiary.

Following the first registration, the trustees will need to ensure that the Register is updated each tax year, and in addition trustees need to be aware of the need to inform HMRC each time there are changes to the beneficial ownership of a trust, for example whenever a trustee retires from their position or is appointed, or when beneficiaries change.

Trustees need to be aware of the requirements of the Trust Registration Service and if the trust needs to be registered, ensure that they comply with the registration process by the deadline. HMRC have provided an online registration service, or trustees may wish to ask their accountant to register the trust if they act as agent for the trustees. For more information on registering a trust visit Register a trust as a trustee – GOV.UK (

At FAS, we have long provided independent investment advice to trustees and guided them in respect of their duties. Whilst the responsibility rests with the trustees to register the trust correctly, we are on hand to give guidance to trustees if required.

If you are interested in discussing the above with one of our experienced financial planners at FAS, please get in touch here.


The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.  The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.

A collection of different cryptocurrencies

Crypto – investment or gamble?

By | Investments

Cryptocurrencies are regularly in the headlines and growing in popularity, but are they really investments?

Cryptocurrencies, of which Bitcoin is the most famous (or notorious, depending on your viewpoint), are not currencies in any practical sense of the word.

Think of the pound in your pocket:

  • It has the backing of a state-owned central bank;
  • its value is stable, give or take the longer-term impact of inflation; and
  • it can be easily used in any financial transaction as a method of payment.

Graph illustrating Bitcoin in 2021


According to the Financial Conduct Authority (FCA), in the UK, 2.3 million people own some form of cryptocurrency, with an average holding of about £300 – meaning that cryptocurrencies account for about 0.1% of UK household wealth. Other research shows ownership to be concentrated largely among Generation Z – 45% of 18–29-year-olds have placed some money in cryptocurrencies and half of those have gone into debt doing so. However, 10% of cryptocurrency holders in the UK are over 55, with potential inheritance tax and legacy issues for their estates.

Many of these new investors may believe these virtual currencies are socially as well as personally beneficial. But with the huge amounts of energy required in cryptocurrency mining just one area of controversy, they may not be simply a benign option for those seeking to sidestep traditional investing.

HMRC has recently entered the fray, seeking to contact holders of crypto assets to remind them that they would owe tax on any profit from disposal of cryptocurrencies, whether from sale, exchange, or where used for goods or services in the limited areas available.

Some cryptocurrencies called stablecoins, such as Tether, aim to have a fixed value (often linked, ironically, to a traditional currency). However, most cryptocurrencies have anything but a stable value, as none have central bank backing and it can be difficult or near impossible to buy anything with them.

Despite these factors the cryptocurrency market has grown at a breakneck pace: over the last five years to November 2021 its value has increased from USD $16 billion to USD $2,600 billion. The FCA does not directly regulate cryptocurrencies. However, UK cryptocurrency businesses are required to register with the FCA and comply with money laundering rules. The regulator makes clear in its consumer guidance (see that:

  • Cryptocurrencies are regarded as “very high risk, speculative investments”;
  • purchasers are unlikely to be covered by the main investor protection schemes; and
  • if you choose cryptocurrencies, “you should be prepared to lose all your money”.

Scams, particularly using social media and involving offshore companies, are another high risk of the cryptocurrency market. One international scheme, the subject of an in-depth podcast investigation, operated in over 175 countries to the tune of $4 billion but turned out to be a complex scam with the founder still apparently unaccounted for.

As the Bitcoin graph shows, it is possible to make – and lose – large amounts in cryptocurrencies. With the development and growing popularity of app platforms making ‘trading’ and tracking more accessible and convenient, you may be tempted to join in. But be warned – other, less exotic, and better regulated investments could well be a wiser choice. As always, if you wish to discuss in more detail, please give us a call.

If you are interested in discussing the above with one of our experienced financial planners at FAS, please get in touch here.

The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.  The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.

Woman at laptop reviewing tax allowances - What current tax issues should you be aware of

Time for a tax planning tune-up?

By | Tax Planning

With several factors putting the dampeners on income just now, including tax increases due to take effect this year, now is a good time to make sure that you’re making full use of any tax allowances that are available.

One of the services we provide at FAS is to help our clients ensure their income, their investments and their savings are as tax-efficient as possible. Why is this important? Because taxes can become a significant drag on the performance of your assets, and could reduce your overall wealth. Even small amounts can really add up over the years. While tax efficiency should never be the primary consideration of any investment decision, it makes sense to take advantages of any tax allowances you are entitled to.


What current tax issues should you be aware of?

Earlier in 2021 (back in March, to be precise) Chancellor Rishi Sunak announced that all income tax thresholds would be frozen at current levels until 2026. This was confirmed in the October Budget announcement. This means:

  • The amount of money that people can earn tax-free stays at £12,570.
  • The ‘basic rate’ tax band for earnings of between £12,571 to £50,270 remains at 20%
  • Earnings of £50,271 to £150,000 will be taxed at the ‘higher rate’ of 40%
  • Anything over £150,000 will be taxed at the ‘additional rate’ of 45%

Of course, while a tax ‘freeze’ doesn’t sound too worrisome on its own, the government is counting on it earning them more revenue, as earnings rising with inflation will push more people over the thresholds, thereby leading them to pay more in tax. As a reminder, consumer price inflation in Britain reached 4.6% in November, its highest level in nearly a decade, thanks in part to soaring energy prices pushing up household bills. We expect inflation to ease later in the year and into 2023, but even so, the squeeze from higher costs and an increased tax burden is likely to be felt by many this year.


National Insurance is on the rise

One tax that is on the rise is National Insurance. From April 2022, employees, employers and the self-employed will all pay an extra 1.25p in the pound in National Insurance. This move was announced in September, and the additional income generated will be used to help fund health and social care costs. The increase is expected to cost an employee earning £20,000 an additional £130 each year, whereas someone earning £50,000 can expect their National Insurance contributions to increase by more than £500. From April 2023, National Insurance will return to its current rates, but the extra tax will stay in place – albeit collected under the newly titled ‘Health and Social Care Levy’. However, unlike with National Insurance contributions, the new levy will also be paid by state pensioners who are still working.

Overall, with income tax thresholds frozen, higher inflation and National Insurance contributions hiked up, now really is a good time to make sure your personal finances are as tax-efficient as they could be. The best place to start is to make use of existing tax allowances.


Individual Savings Account (ISA) Allowance

Every UK taxpayer aged 18 or older is entitled to a £20,000 annual ISA allowance, and you do not have to pay any tax on your income generated or gains made within the ISA. There are four types of ISA currently available:

  • Cash ISA
  • Stocks and Shares ISA
  • Innovative Finance ISA
  • Lifetime ISA (which has an annual limit of £4,000)

You can save up to the full annual allowance in one type of ISA or split the allowance between them. However, the Lifetime ISA has an annual investment limit of £4,000. As a reminder, the tax year runs from 6 April to 5 April the following year, and you can’t carry any unused allowance over to a new tax year. The ISA allowance resets back to the annual limit on 6 April. ISAs are one of the simplest, most flexible, and most popular ways to invest tax-efficiently, and they really are a great starting point for investors and savers of all sizes.

Personal Savings Allowance

The Personal Savings Allowance (PSA) was introduced back in 2016, and means that most UK savers are no longer required to pay tax on their savings income. For example:

  • Basic rate taxpayers can receive up to £1,000 a year in savings income tax-free.
  • Higher rate taxpayers have an annual PSA of £500 before they start paying tax on their savings income.
  • Additional rate taxpayers do not receive a PSA and must pay tax on any savings income they receive on savings outside of their Stocks and Shares ISA or Cash ISA.


The Starting Rate Band

One tax allowance that gets relatively little attention is the Starting Rate Band for savings. This is a tax band which applies to savings income that falls within certain limits. If any of your taxable savings income falls within the first £5,000 of the basic rate band, you will not be required to pay any tax on that taxable savings income, as the starting rate for savings income is zero.

However, the savings band is not available if your non-savings income (excluding dividend income) exceeds the sum of the personal allowance (and blind person’s allowance, if claimed) and the savings band. There’s no question that the Starting Rate Band isn’t widely known about, and is perhaps unnecessarily complicated. This is why it’s worth getting your financial situation, including your savings and investments checked by us, so we can determine which allowances apply.


Dividend Allowance

If you own shares in a company, you can earn money from those shares in two ways – either from any dividend payments the company makes, or by selling the shares for a profit. When it comes to dividends, all UK taxpayers are entitled to an annual tax-free dividend allowance of £2,000. However, if the dividends you receive are above this amount – and the shares are held outside of an ISA wrapper – you will be liable to pay tax at a rate of 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers, and 38.1% for additional rate taxpayers.


Dividend tax rates are increasing

However, from 6 April 2022, dividend tax rates will be increasing by 1.25%. The new rates will apply to dividends taken as income in the 2022-23 tax year. In practice, this means that those who pay tax on dividend income through their tax code will see their dividend tax bill increase from next tax year. Those who pay tax via self assessment will have until 31 January 2024 to pay the increased amount of tax on next year’s dividend income.

It’s likely that many people will be left with higher tax bills as a result of this increase, but if this applies to you, there are some options on how to minimise the tax burden. For example:

  • Make full use of your ISA allowances: the simplest way to reduce the amount of dividend tax is to hold dividend paying investments within an ISA.
  • Increase your pension contributions: Dividends paid on investments held in your pension are also tax free, so maximising your pension annual allowance each year could be another tax-efficient way of saving for longer-term goals.
  • Invest as a couple: If you’re married or in a civil partnership, and your partner pays tax at a lower rate, you could potentially reduce your overall dividend tax bill by holding some investments in your partner’s name.

With a bit of tax planning, it’s possible to minimise the cost implications of freezes, tax hikes and higher inflation. If you talk to us, we can review your financial situation, along with your savings and investments, to ensure they are as tax-efficient as possible. There’s nothing to lose from having a tax tune-up, and you could save a considerable amount in the long run.


If you are interested in discussing your tax situation with one of our experienced financial planners at FAS, please get in touch here.


This content is for information purposes only. It does not constitute tax planning or financial advice.